How to Read an Apartment Offering Memorandum From a Broker
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A broker's offering memorandum (OM) is a marketing document written to sell the building. Read it for facts you can verify (unit mix, year built, current rents, taxes) and treat the seller's projections as the seller's view. Rebuild the numbers from the rent roll and trailing twelve months before you write an offer. This is a different document from the private placement memorandum you give investors; see how to read a PPM for that one.
Rules and practices are as of October 2026.
What is in an OM?
Usually a property summary, photos, location notes, unit mix, a rent roll summary, income and expense figures, a list of improvements, comparable sales and a pro forma. Some include financing notes or a bidding process. The pages differ in how reliable they are.
| Section | How to treat it |
|---|---|
| Unit mix, square footage, year built | Verify with records and a site visit |
| Current rents and occupancy | Compare to the rent roll |
| Income and expenses | Compare to the T-12 and bank statements |
| Pro forma | Seller's assumptions, rebuild your own |
| Market and comps | Check with your own research |
Which numbers should I check first?
- Rent roll vs. OM rents. Do they match? See rent roll and T-12.
- Expenses. Are taxes, insurance, repairs and payroll realistic? Sellers sometimes show unusually low numbers; see property tax reassessment.
- Physical vs. economic occupancy. Units can look full while rent is not collected; see economic vs physical occupancy.
- Capital needs. Roofs, boilers, parking and plumbing. Ask for the property condition report if there is one.
- Rent growth and exit cap assumptions. Compare with rent growth assumptions and exit cap rates.
What does the pro forma hide?
It often assumes that rents rise quickly, that expenses stay flat, and that all renovations get done on time. It may leave out replacement reserves or use a lower management fee than you would pay. Build your own model with conservative inputs and include a downside case where income falls; see underwriting basics. Never repeat the broker's pro forma to investors as if it were yours.
What should I ask the broker?
- Why is the owner selling, and when do they want to close?
- How many offers are expected, and what is the deadline?
- Are there rent concessions, unpaid rent or unusual leases?
- What capital work has been done in the last five years?
- What is the utility setup, and are charges passed to residents?
- Is there a current loan that can be assumed? See assuming a seller's loan.
When do I stop reading?
When you find something that does not fit your buy box or your numbers. A fast no frees time for a better building. See screening deals quickly.
How DoorRaise fits in
DoorRaise starts when you have a deal worth raising money for. It forms the LLC, prepares the offering documents and runs escrow at Enterprise Bank & Trust with wire-only funding under Reg D. It is for apartment buildings with 5 or more units. Fees are $1,500 to set up (due when you submit the deal, non-refundable), then $5,000 a year from closing (only if the deal closes). See offering documents.
FAQ
Is an OM the same as a PPM?
No. An OM is the broker's sales document. A PPM is the document you give investors in a private offering.
Can I rely on the OM numbers?
Not without checking. Brokers usually add a disclaimer that the buyer must verify everything.
Do I show the OM to investors?
You can share facts you have verified, but your own materials should use your underwriting and disclose risks.
What if the OM and the rent roll disagree?
Ask the broker to explain, and use the source documents.
Sources
This article is general information, not legal advice. Talk to a securities attorney about your deal and about what you must disclose. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.